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1. Foundations of American Law. The Nature of Law The Resolution of Private Disputes Business and The Constitution Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking. McGraw-Hill/Irwin Business Law, 13/e.

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foundations of american law

1

Foundations of American Law

The Nature of Law

The Resolution of Private Disputes

Business and The Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

McGraw-Hill/Irwin Business Law, 13/e

© 2007 The McGraw-Hill Companies, Inc. All rights reserved.

business the constitution

Business & The Constitution

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"The very idea of the power and the right of the People to establish government presupposes the duty of every Individual to obey the established Government."

-- George Washington (Farewell Address, September 19, 1796)

learning objectives
Learning Objectives
  • Basics of the Constitution and federalism
  • Relationship between federal and state powers
  • Important legal principles: supremacy, preemption
  • Constitutional guarantees and limitations

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overview of the constitution
Overview of the Constitution
  • Establishes a tripartite government to ensure a separation of powers
  • A system of checks and balances exists in which no one branch may control another

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the power to regulate
The Power to Regulate
  • Federal government has exclusive power to administer certain national concerns, such as war and currency
    • Some powers are shared with the states
  • States possess exclusive power to enact laws to protect general welfare, health, and safety

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supremacy preemption
Supremacy & Preemption
  • The Constitution and statutes enacted by Congress, including treaties, are the supreme law of the land
  • Congress may enact laws on certain issues and preempt state regulation of that issue

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testing constitutionality
Testing Constitutionality
  • Courts apply a means-ends test to review allegedly unconstitutional statute
    • Rational basis test (minimal scrutiny)
      • if law has rational basis, it will stand
    • Intermediate scrutiny
      • law must substantially relate to important governmental objectives to stand
    • Strict scrutiny
      • Law presumed invalid if, on its face, it is based on race, ethnicity, and religion

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the commerce power
The Commerce Power
  • Commerce clause (Article I, Section 8, Clause 3) applies to interstate commerce
  • Supreme Court has applied the power to intrastate commerce when the activity affects interstate commerce
    • See Gonzales v. Raich

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the first amendment
The First Amendment
  • First Amendment guarantees freedoms of religion, speech, press, assembly, and petition to individuals (and corporations)
  • Restriction on commercial speech is valid if it (1) seeks to implement a substantial government interest, (2) directly advances interest, and (3) is least restrictive method of achieving interest (see Kasky v. Nike)

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constitutional limitations
Constitutional Limitations
  • Fifth Amendmentprohibits federal government from depriving “any person of life, liberty, or property without due process of law” (due process clause)
    • Protection from unreasonable procedures or unreasonable laws
    • Applied to states through Fourteenth Amendment

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constitutional limitations1
Constitutional Limitations
  • Equal protection clause of Fourteenth Amendmentprohibits a government from treating one person differently than another without reasonable grounds for differential
    • Basic test: rational basis (minimal)
    • “Suspect” classifications (race, gender, ethnicity) require higher level of scrutiny

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constitutional limitations2
Constitutional Limitations
  • Phrase “depriving a person … of property” known as the takings clause
  • Requires government to pay compensation to property owner for taking property for public purpose through eminent domain

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test your knowledge
Test Your Knowledge
  • True=A, False = B
    • The Constitution establishes a tripartite government
    • The federal government has exclusive power over matters of war and taxation
    • States possess exclusive power to enact laws to protect welfare, health, and safety
    • The Fifth Amendment prohibits depriving any person of life, liberty or happiness
    • Federal supremacy means that the U.S. Constitution is the supreme law of the land

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test your knowledge1
Test Your Knowledge
  • True=A, False = B
    • The Federal government may not interfere with interstate commerce
    • The federal government may not restrict individual or commercial speech
    • Constitutional limitations on governmental power includes the Fifth Amendment
    • The “takings clause” means that the federal government cannot take away an individual’s freedom

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test your knowledge2
Test Your Knowledge
  • Multiple Choice
    • Courts apply a means-ends test to review an allegedly unconstitutional statute. Which level of scrutiny applies to a statute that gives benefits to people based on their religion?
      • (a) Minimal scrutiny
      • (b) Intermediate scrutiny
      • (c) Strict scrutiny

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test your knowledge3
Test Your Knowledge
  • Multiple Choice
    • Substantive due process refers to a prohibition against:
      • (a) Unreasonable procedures
      • (b) Unreasonable laws
      • (c) Unreasonable (unfair) results
      • (d) Both A & B
      • (e) All of the above

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thought question
Thought Question
  • What constitutional issues are important to you?

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